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SouthwestPowerPool SPPorg southwest-power-pool
Helping our members work together to keep the lights on... today and in the future.
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SELF-COMMITTING IN SPP MARKETS OVERVIEW, IMPACTS, AND - - PowerPoint PPT Presentation
SELF-COMMITTING IN SPP MARKETS OVERVIEW, IMPACTS, AND - - PowerPoint PPT Presentation
SELF-COMMITTING IN SPP MARKETS OVERVIEW, IMPACTS, AND RECOMMENDATIONS Helping our members work together to keep SPPorg southwest-power-pool SouthwestPowerPool the lights on... today and in the future. OUTLINE Opening remarks
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RECOMMENDATIONS
- In order to improve price formation and market efficiency, we
recommend SPP and stakeholders work to reduce the incidence of self-commitments.
- We recommend modifying SPP’s market design by adding
- ne additional day to the market optimization period.
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TAKEAWAYS: EMPIRICAL RESEARCH
- The volume of self-committed megawatts has declined over time, but remains nearly
half of the recent megawatt volume.
- Resources with long lead times and/or high start-up costs tend to be self-committed
instead of market-committed.
- Units that are self-committed generally have much higher capacity factors than those
that are market-committed. However, these results differ substantially by fuel type.
- In almost all cases, self-committed generators had lower revenues because of
negative congestion prices; whereas, market-committed generators typically had a more balanced congestion profile.
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TAKEAWAYS: SIMULATIONS
- When the market made unit commitment decisions, and lead times remained
unchanged, both market-wide production costs and market clearing prices for energy increased.
- When the market made unit commitment decisions and lead times were modified to
allow the day-ahead market to commit the resources with longer lead times, market- wide production costs were essentially unchanged and market clearing prices for energy increased.
- System-wide energy prices increased by about $2/MWh (seven percent) on average.
- Congestion prices changed by about –$1/MWh to $1/MWh on average.
- To optimize long-lead time resources’ participation in the market, the economic
commitment process would need to solve over a longer market window.
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RIGHTWARD SHIFT IN MARKET SUPPLY CURVE
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THE MARKET FEEDBACK LOOP
Market Prices Investment & retirement Installed capacity
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PERCENTAGE OF MEGAWATTS DISPATCHED BY COMMITMENT STATUS
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PERCENTAGE OF SELF-COMMITTED MEGAWATTS BY FUEL TYPE
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DISPATCH MEGAWATT HOURS BY FUEL TYPE BY COMMITMENT TYPE
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LEAD TIME HOURS BY COMMITMENT STATUS
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COLD START TIME AND COLD START COST BY RESOURCE FUEL TYPE
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CAPACITY FACTORS BY FUEL TYPE BY COMMITMENT TYPE
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PERCENTAGE OF MARGINAL HOURS BY FUEL TYPE, INTRA-HOUR CLASSIFICATION
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GENERATION MEGAWATTS TO LOAD MEGAWATTS BY COMMITMENT TYPE
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CONGESTION DOLLARS BY FUEL TYPE, BY COMMITMENT STATUS
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FINDINGS: SIMULATIONS
- The key to reducing self-commitment while not increasing costs is
multi-day economic unit commitment.
- Increasing the optimization window by another 24 hours allows the
market to more effectively optimize resources with long start-up times. This enhancement combined with a reduction in self-commitment, would likely benefit ratepayers by reducing production costs in addition to sending more clear investment signals.
- If the optimization window is not lengthened, and self-commitment is
eliminated, investment signals would be more clear, but production costs would likely increase.
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SCENARIO 1 VS SCENARIO 2, SYSTEM MARGINAL PRICE AND PRODUCTION COST
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SCENARIO 1 VS SCENARIO 3, SYSTEM MARGINAL PRICE AND PRODUCTION COST
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SCENARIO 1 VS SCENARIO 3, DISPATCH MEGAWATTS BY FUEL TYPE
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